DETROIT — The Southeast Michigan Purchasing Managers Index (PMI) for March rebounded to 55, up from 47.3 in February. Though difficult to predict if it will be a sustained increase, early indications suggest the economy is simply emerging from the effects of a particularly harsh winter climate. A PMI value above 50 generally suggests economic growth.
“Three key indices contributed to the sharp upswing in this month’s PMI,” said Nitin Paranjpe, a supply chain faculty member at Wayne State’s School of Business Administration, who interpreted this month’s results. “Production, New Orders and Employment indices all increased strongly, signaling an expanding economy. Also, notably, the Finished Goods Index dropped from 51.7 to 40.9, which also supports a growing economy,” Paranjpe said.
The dramatic swings within the March report are reflected in the respondents’ comments as well, ranging from “A couple of large road building projects will spike the local economy,” to “Russia/Ukraine/Crimea and Venezuela will have far-reaching effects,” and “We have so many issues it’s hard to figure out where this economy is headed.” Overall, just over 80 percent of respondents see the economy as stable or more stable, with fewer than 20 percent expecting less stability over the next six months.
March prices for fuel costs, snow removal costs, hardwood lumber, steel, copper, plastic based parts, aluminum, and resins were up in price. Maintenance, repair, and operations items were down in price.
The Southeast Michigan Purchasing Managers Index (PMI) is a research partnership between Wayne State University’s School of Business Administration and the Institute for Supply Management – Southeast Michigan.
The full PMI report for March can be found at http://www.ism-sem.org/resources/files/PMI-March-2014.pdf.
The Institute for Supply Management - Southeast Michigan serves its members as an affiliate of the Institute for Supply Management by providing superior opportunities for education, networking, and career enhancement as a means of advancing and promoting the leading edge practices and profession of purchasing and supply management. Visit their website athttp://www.ism-sem.org.
Wayne State University is a premier urban research institution of higher education offering 370 academic programs through 13 schools and colleges to nearly 28,000 students. The School of Business Administration offers AACSB accredited programs at the bachelor, master and doctoral levels. Learn more at www.business.wayne.edu.